The FCA has changed its mind about contactless limits, offering card providers the flexibility to decide their own contactless limit for their customers.
Many card providers allow their customers to adjust their personal contactless limits or turn off the contactless function altogether. The FCA is now encouraging firms to continue to do so, a change from its announcement form March, when it considered removing the GBP 100 limit.
More convenience for customers
FCA sees smarter payment tech and more modern fraud controls, so it decided to let firms have free rein over their contactless payment limits, allowing them to tailor the functionality to fit their customers’ needs and demands. While the regulator does not expect to see immediate changes, it wants financial institutions to offer flexible and innovative solutions in the UK, making payments more convenient for customers.
Even if a user’s card is used fraudulently, they will still be protected, as firms will refund the amount lost. Contactless payments offer the same protection as any other card payment, and banks and companies must reimburse unauthorised fraud cases, such as when somebody’s card has been lost or stolen. The UK Finance’s Annual Fraud Report 2025 estimates that contactless fraud rates are currently low, at circa GBP 1.3 per GBP 100 spent on contactless transactions, when compared to GBP 6 per GBP 100 for all unauthorised fraud.
The initiative is one of the 50 measures that the FCA mentioned in its letter to the Prime Minister in January, aimed at supporting economic growth and prioritising digital solutions. The proposals are out for consultation until 15 October 2025. One option put forward is to allow firms that use technology to reinforce fraud controls to set their own limits, as happens in the US. Any changes would need to support good customer outcomes as required by the Consumer Duty.
The announcement gathered mixed reactions among several institutions.For example, Hannah Fitzsimons, CEO at Cashflow, provided an exclusive comment on this matter: `The FCA’s move to let payment providers set their own contactless limits is long overdue. Regulators are finally catching up with how people actually pay. This isn’t tinkering at the edges; it’s a decisive step towards a pro-growth framework that recognises the way digital payments already work. Digital wallets on smartphones face no limits, so why should cards be stuck in the past?`.
Chris Jones, Managing Director at PSE Consulting, also mentioned that: `The FCA’s proposal to let issuers set their own contactless payment limits may sound like progress, but for merchants, it risks creating confusion rather than convenience. Many retailers are already fielding questions about the existing £100 limit, and in reality, most staff can’t offer advice - they simply follow whatever the terminal instructs. Introducing variable limits set by individual banks would only add to this uncertainty.`, adding that `Terminals will still prompt for a PIN if a limit is exceeded, but removing a single, consistent threshold complicates day-to-day operations and could slow queues. This move is likely to strengthen the role of Apple and Google at the point of sale.`
In addition, Scott Dawson, CEO of DECTA UK, also shared his insights, mentioning that `The FCA's proposal to give providers the freedom to set their own contactless limits is a welcome and progressive move. This is a clear signal that the regulator is focused on enabling, not restricting, the payments ecosystem. While there are legitimate concerns about the risks high limits could create, these risks can and should be addressed by the fraud prevention frameworks the providers need to have in place. We need fraud prevention to be modern and keep up with consumer demand. The narrative around a consumer preference for the status quo is a tired one; it's an industry's responsibility to educate and innovate, not simply acquiesce to a fear of change.`
